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June 20, 2013, 3:05 p.m.
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Seeking an ocean of audience: Honolulu Civil Beat partners with Huffington Post to seek new revenue streams

The Hawaii news site is looking to organizations like the Texas Tribune to get beyond its subscription-based business model.

When Honolulu Civil Beat launched three years ago, it took some contrarian stands. At a time when many civic-minded journalism startups were filing for nonprofit status, Civil Beat bet on succeeding as a for-profit. When many thought digital advertising would be the key driver of revenue growth, Civil Beat didn’t take ads. And when most news startups were trying to build an audience by giving away their content, Civil Beat was betting on subscriptions — and pricy ones, at that.

The news site’s latest move — partnering with The Huffington Post to launch HuffPost Hawaii this fall — is an attempt to balance out some of those bets in a quest for greater revenue diversity. HuffPost is, of course, dedicated to free content with wide reach, and its business is built around the kind of ads that Civil Beat ignores.

“Civil Beat is a model with a focus of trying to build something new — not just in how we write stories and deliver them, but how we pay for them,” site general manager Jayson Harper said. “Huffington Post in some sense provides us with a megaphone to give that to a larger population within the state who will hear and see who we are.”

Founded by eBay founder Pierre Omidyar and Randy Ching, Civil Beat focuses on politics, government, and investigations, and it charges a comparatively steep subscription price to read and comment on the site — $20 per month, higher than even The New York Times. That will remain. The two sites will run in parallel; Civil Beat will look and operate essentially the same way it does now, with some HuffPost Hawaii stories running off of its homepage and subscription prices unchanged. HuffPost Hawaii will exist as a separate site creating most of its own content, with Civil Beat stories excerpted there as well.

Civil Beat says the two sites will also maintain “separate staffs,” though that applies only to the writer-reporters, since editor Patti Epler and general manager Harper will be in charge of both sites.

The partnership is not a comment on Civil Beat’s commitment to subscriptions, Harper said, and the site is not in financial trouble. Still, “the subscription model is a very tough model to create complete financial sustainability,” he said.

Unlike Civil Beat, HuffPost Hawaii will have traditional advertising displayed alongside quick takes on Hawaii news and, according to HuffPost’s announcement, content like “slideshows of Hawaii beaches.” Harper said the Civil Beat organization will “absolutely” benefit from that revenue, though a confidentiality agreement barred him from releasing the specifics of how and if that money will be allowed to flow to Civil Beat.

“The real reason we’re doing this is because we do see ways to grow revenue and it makes sense for both parties,” Harper said, referring to potential new Civil Beat subscribers, revenue from HuffPost Hawaii ads, and the additional brand awareness that may make their sponsorships more valuable.

Civil Beat, which currently operates with six reporters and two editors, will indirectly benefit from the collaboration because it will allow Epler to hire three new reporters for the HuffPost side. “I hope that the Huffington Post staff can be covering things like the governor’s press conference, or, say, a helicopter that goes down in downtown Honolulu — they’ll do that, and our staff won’t have to do that anymore,” Epler said. “That will free up some of our beat writers to do more in-depth things,” like a recent multi-part investigation into oversight of a polluted local waterway.

In search of revenue diversity

In Hawaii, as elsewhere, the media business is in flux. Financial troubles forced Honolulu Weekly this month to announce it was publishing its final issue (though its editor has now said she is attempting a revival). Three local TV news stations merged in 2009. The remaining Honolulu daily, the Star-Advertiser, also operates with a partial paywall (the site’s front page, breaking news, and blogs remain free). But there is still some audience loyalty: Ad Age recently reported that Hawaiians are paying attention, with 47 percent of Honolulu adults saying they read a daily newspaper, one of the highest numbers in the country.

As his model for diversifying Civil Beat’s revenue, Harper pointed to the Texas Tribune, which is grant-supported but also makes significant money from events and other sponsorships. It’s not an apples-to-apples comparison — the Tribune is a nonprofit, and Texas’ population is 19 times the size of Hawaii’s. Still, Harper is working to organize sponsored events and potentially allow for sponsors to claim parts of the Civil Beat site itself. “It’s not the only way to build a sustainable revenue model for online news organizations, but it’s a good start,” he said.

Epler and Harper recognize that The Huffington Post’s model is built around traffic and Civil Beat’s is not. But they hope their collaboration with The Huffington Post helps them with those sponsorship efforts, too. “To increase the share in the market of the stories we’re doing has tangible benefits — the more we can talk to our partners and see people talking about those stories, the better,” Harper said.

For The Huffington Post, the Civil Beat collaboration is more like its international partnerships — which include agreements with Le Monde for its French edition, Gruppo Espresso in Italy, and The Asahi Shimbun in Japan — than its other U.S. city verticals. Those international partnerships excerpt content from those news organizations, whereas verticals like HuffPost Chicago, Detroit, and Miami simply collect content related to those metro areas. In explaining the Huffington Post’s interest in Hawaii, Arianna Huffington cited her relationship with Omidyar and seemed to view the site as a chance to learn from the Hawaiian culture.

“As the world’s oasis for unplugging and recharging — and the home of the Aloha spirit — Hawaii is an ideal place to explore all these themes and to engage the community,” Huffington said in an email.

On Civil Beat itself, reaction to the partnership has been largely, well, civil — minus a few Facebook comments. “Some people were like, ‘This is the end of Civil Beat, nice knowing ya, the Huffington Post is going to take over,'” Epler said. But their model hasn’t changed, she insisted. “I wrote a column maybe two weeks ago saying, we’re not getting eaten by the HuffPost monster. That’s just not what’s happening.”

Photo of downtown Honolulu from Diamond Head by John Fowler used under a Creative Commons license.

POSTED     June 20, 2013, 3:05 p.m.
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